As the title suggests, through luck or some skill and good podcasts, im up 70% by buying and selling a few times and then settled on 5 well know companies, all are up 8% to 70!%.
I feel this is kinda ludicrous in the midst of a global pandemic, and often I get the vibe to just cash in the profits and call it āa good eve at the casinoā. What stops me is that obviously, where do I then put the cash that would make sense? Bonds, accounts, ISAs barely beat inflation, let alone the 70% gain above. Likewise my mortgage rate is so low, it makes no sense to speed up payments, and that my only āloanā. The total isnāt enough to say, put a deposit on a second propertyā¦ so what to do? Anyone in a similar situation?
Too good to be true? I would say āToo good to be repeatableā. In a typical year itās not easy to find extremely trendy stocks like Tesla, Zoom or GGP, and the average US market performs around +8/+10%.
None so far managed to achieve an average annual return of 70%. Zero reported cases in the history. Warren Buffett in his best years performed around +45% at year. In his whole career he did an average annual return of +20%.
In conclusion, itās too good but itās true, at least for 2020. Be prepared for a not-so-good 2021.
Good advice, but timing is the big one, I see two outcomesā¦ Either the market corrects in successive selloffs in Jan to Mar, as youāre suggestingā¦ in which case i can wait and then sell when it starts unfolding and then watch for when it bottomsā¦ Orā¦ and this is where my inexperience worries me, what if the correction comes suddenly and instantly? Iām thinking like the shares across the board fall 40/50% in a day - the mother of all crashesā¦ Is this likely?
I donāt think itāll be an almighty crash, but there could be a slight pullback, especially in sectors like automotive and tech.
Around now is usually when institutions and big investors are trimming their positions and reevaluating their portfolios ahead of the next year. So might be wise to follow suit and sell some of the holdings, if not the entirety.
And as @jbowen said, it also depends on the companies. Worth reading up on potential headwinds and tailwinds etc.
Iāve always found investing more stressful when I was thinking about selling at the market top. Itās been a lot easier for me to just hold a portion of my portfolio as cash for any pullbacks.
Unless your investment goals are short term donāt let your gain weigh on your mind. Youāve made 70% and this might fall to 50% but thereās a good chance youāll be up higher in the medium term
My wife had a couple of free shares + some shares of chocolate brand that she bought because āitās her favouriteā (they are closing stores and loosing money). She is up 100% something since March.
This is rather hilarious.
I also like the saying āmarkets will be irrational longer than you can stay saneā. Timing is everything but being 1st is no guarantee of anything either